Background: Praziquantel (PZQ) is the drug of choice for treatment of all human schistosomes. It is used in population based targeted or mass deworming strategies in several countries. The effect of PZQ on S. hematobium has not been studied in Ethiopia. The objective of this study was to determine the efficacy of PZQ against S. haematobium in Dulshatalo village, western Ethiopia. Methods: A prospective study was conducted from October to December, 2007. Urine samples from 341 residents were collected and screened for haematuria and proteinuria using urinalysis dipstick. S. haematobium eggs were detected and quantified using filtration techniques. The participants who were positive for haematuria were treated with a standard dose of PZQ (40 mg/kg). Data on pre and 24 hours post treatment symptoms were collected via questionnaire. Urine samples were also collected 7 weeks after treatment and examined to assess the cure and the egg reduction rates. Results: The prevalence of S. haematobium among the study participants was 57.8% (197/341). Haematuria was detected in 234 (68.6%) of the study participants. For PZQ efficacy asessment, 152 of the treated participants were considered. The presence of S. haemetaobium eggs showed statistically significant association (p < 0.05) with haematuria and proteinuria. Seven weeks post treatment, the extent of haematuria and proteinuria decreased from 100% to 40.8% and 94.07% to 48.7%, respectively. The cure and the parasitological egg reduction rates seven weeks post treatment were 86% and 85%, respectively. Post treatment symptoms revealed a wide range of side effects including straining, abdominal pain, nausea and headache. Conclusions: There were marked cure and egg reduction rates, together with mild and short lived side effects of PZQ for treatment of S. haematobium, in this study.